Judge Rejects SEC’s Request to Freeze Binance.US Assets, Orders Parties to Compromise

When the SEC filed a lawsuit against Binance on June 5th, it also requested a complete freeze of all Binance.US assets, citing an alleged trend of collecting customer funds and moving them offshore.

Granting this request would not only have been devastating to Binance’s operations — not to mention overkill, since the allegations have never been proven — it would have also damaged the company’s reputation to the point that Binance would have had a hard time. Back to his feet if proven innocent.

Unacceptable terms

Binance.US lawyers immediately requested that the SEC’s request be dismissed, stating that they “will not accept the death penalty eight days into the case.”

Moreover, in a 42-page memo filed jointly by Binance.US and CZ, the defendants criticized the SEC for making false accusations, as no clear evidence of wrongdoing was found that would justify an emergency asset freeze.

“There is absolutely no ’emergency’ here, other than one that the SEC creates for its own purposes.”

Do it among yourself

In response to the SEC’s motion and arguments presented by the Binance.US legal team, the judge presiding over the case denied the agency’s request. Instead, Binance.US and the SEC were used Command To work together to devise a plan that will allow the exchange to continue to operate as normal while ensuring that customer assets remain safe and, most importantly, within the US jurisdiction.

“Turning it off completely would have dire consequences not just for the company but for digital asset markets in general. (Work it out) — the nitty-gritty is better handled by me.”

In order to reach a compromise, the SEC wants all clients’ assets to be returned to the United States if any are hosted elsewhere.

Binance.US has not yet objected to this proposal, requesting only that it be allowed to use, withdraw and send assets that would allow it to cover operational costs and salaries.

SEC/Binance Newsflash: Dueling Approval Orders (Read It Now)

Both the SEC and the Binance defendants have filed draft orders of what each party wants the judge to order in the SEC/Binance emergency asset freeze enforcement proceedings.

There is clearly a lot of conflict… pic.twitter.com/UWjXSgL5lR

John ReedStark June 13, 2023

If this plan is approved, Binance.US undertakes to refrain from any transfers or payments to other Binance entities without the express approval of the presiding judge in the case.

The judge has since ordered Binance.US to provide a rough list of recurring expenses and operational costs for preliminary viewing.